The ECB keeps interest rates steady despite Trump's instability

BrusselsStability and predictability versus uncertainty and sudden shifts. As expected, the European Central Bank (ECB) decided this Thursday to maintain interest rates at 2% for the fifth consecutive time, despite Donald Trump's threats in recent weeks and his offensive against Jerome Powell, the chairman of the Federal Reserve (Fed, the US central bank).

The eurozone's central bank has no reason to change the price of money. Inflation is already under control, and economic growth in the countries of the single currency is more positive than initially expected. Specifically, the price increase was 1.7% this January compared to the same period last year, according to provisional data from Eurostat, the European Commission's statistical office. And, regarding the increase in gross domestic product (GDP), the ECB's own economic forecasts indicate that it will be 1.2% in 2026 and 1.4% in 2027 and 2028.

The ECB focuses particularly on core inflation, which is the index that calculates the increase in the price of unprocessed food. Currently, Eurostat calculates that last month it was 2.2% compared to January 2025, one-tenth of a percentage point lower than the rate recorded last December. The target set by the central bank is for it to be around 2%.

It is worth remembering that raising interest rates is the main tool available to the Frankfurt-based institution to curb inflation, which skyrocketed after the pandemic and with the start of the war in Ukraine. However, it is a double-edged sword and also causes an economic slowdown. That's why the bank always seeks a balance, and faced with stable price increases of around 2% and a healthier economy than expected, it has opted to maintain it at 2%.